African Banking Sector Development: The Roles of Remittances and Monetary Policy

Joshua Y. Abor, Mohammed Amidu, Emmanuel Sarpong-Kumankoma and Haruna Issahaku

The African Finance Journal, 2021, vol. 23, issue 1, 20-40

Abstract: The paper investigates the implications of international migrant remittances and monetary policy for banking sector development using a sample of 35 African countries over an eighteen-year period, 1996-2013. We provide additional insight by examining the complex interlocking of three key variables that are important for regulators: remittances, monetary policy and banking sector development. The results show that remittances promote banking sector depth, outreach and stability. We also find evidence to suggest that in middle- and high-income countries, an increase in remittance inflows and contraction of monetary policy are associated with a lowering of banking sector efficiency.

Keywords: Banking; remittances; monetary policy; developing countries (search for similar items in EconPapers)
JEL-codes: D53 E52 F24 G21 N27 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:afj:journl:v:23:y:2021:i:1:p:20-40

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